When Entrepreneurs Get It Right

The conversation inside the boardrooms and offices of companies that consistently make Fortune’s 100 Best Companies to Work For has moved well past why abusive leaders shouldn’t be tolerated—they just aren’t.

Instead, smart and successful leaders focus on cultivating employee engagement, which results in greater loyalty, reduced absenteeism, increased reliability, and better job performance. This isn’t merely driven by a feel-good human relations philosophy; it’s data driven, and studies conducted over the past five years build a bulletproof case for this approach.

Researchers are finding that the new generation of top talent expects nothing less than to be valued. They expect to work for someone who not only invites their input and allows them to solve problems creatively and independently but who also is willing to share the spotlight and loosen up the confines of the traditional hierarchy.

At the core of this mindset is loosening the control held by those at the top. I’ve noted in past blogs how mean men need control, often an obsessive and counterproductive level of it. This flies directly in the face of what millennials are seeking from work.

Forty-one-year-old Guidewire CEO Marcus Ryu is an excellent example of this new breed of leader. He runs his organization in a way that ensures “the right answer wins,” no matter where it comes from in the company. A result of this guiding core principle, Ryu says, is that important decisions “are virtually always decided by consensus, by all the relevant key parties.”

Guidewire’s zero tolerance for what Ryu refers to as “two-facedness” means that a tyrant cannot sneak in using charm as a guise, or if one does, he faces “strong and instinctive pushback from his peers.” And guess what? The company has proven that mean men aren’t necessary to driving a successful business: Guidewire’s stock has more than doubled since going public in 2012.

Respect and trust are critical to a civil company culture. CEOs like Brian Halligan of HubSpot—which was named best midsized company to work for in Boston in 2010—talk the talk and walk the walk. To start with, they treat time differently. Employees are encouraged to work the hours they are most productive, and there is no vacation policy—meaning Halligan essentially is saying to his employees, “I trust you’ll know when you need time off, you’ll take it, and you’ll return refreshed and ready to give this company your all.” In other words, “I entrust you—the employee—with the control to determine what’s best for you and the company.”

Google, of course, is often at the top of Fortune’s famous list, coming in No. 1 for 2015. The tech giant also regularly tops Universum’s “Talent Attractive Index,” which surveys thousands of American college and graduate students about where they would like to work. The current CEO, Larry Page, has a ninety-five percent approval rating on Glassdoor, and over ninety percent of employees would recommend working at Google to a friend.

Mean men, with their overabundance of narcissism, are too infatuated with their own vision to ever cede the kind of independence stronger leaders encourage. Rather than a collective vision that others can rally around, it becomes one man’s manifesto. By placing profit over purpose, mean men often crush employees in a senseless grind. They end up not only losing talent; the reputation they develop repels it. Ultimately, the paradox becomes the actual compromise of profit because of employees’ diminishing motivation and ability to innovate.

On the other hand, I’ve found three key traits that distinguish well-liked and organizationally successful entrepreneurs from their tyrannous peers. “Civil” leaders are

• One aspect of successful leadership requires embracing the reality that employees’ needs vary. One size does not fit all. One small but illustrative example: rather than offering an employee a generic gift card, for example, find out what the employee’s favorite shop is and buy them a gift card there. No sense giving a vegetarian a hundred dollars to spend at Ruth’s Chris Steak House. Civil leaders scale this concept and find strategies large and small to find ways to accommodate their employees rather than simply saying, “It’s my way or the highway.”
• They give accurate and timely feedback on specific accomplishments or initiatives, showing employees they are interested in their unique contributions, even if they were not ultimately successful. I’ve found in my client work that most organizations could stand to do a far better job at creating cultures where continual feedback is the norm, rather than the exception.
• All-inclusive. They take time to recognize the role that behind-the-scenes people and teams play, knowing it helps instill in them a sense of ownership and pride in the business. Think about how David Letterman used to turn the camera on the cameraperson.

Great leaders treat their employees with civility, and they are also united with their peers. Though the leadership team may be spread out across the country, they try to spend time together outside the office. Whole Foods CEO and cofounder John Mackey found that this type of bond leads to a high degree of trust, better communication, and a willingness to work things out when problems and disagreements arise.

It makes sense that when the most senior members of an organization are civil, it trickles down. When a big challenge arises, they’ll be ready to analyze it from multiple perspectives—rather than go into “turf war mode,” while everybody on the sidelines watches and wonders, Are these people doing what we are supposed to aspire to?

As entrenched as mean-man culture can seem, these new CEOs are showing a better way forward. And that’s a fact.